. The goal of this project is to evaluate the hypothesis that phospholipid pro-drugs of antiviral nucleosides such as ddC and ara-AMP may be targeted to liver and to HIV-infected tissues resulting in increased efficacy and decreased toxicity in hepatitis B and AIDS. Using phospholipid pro-drugs of ddC and ara-AMP as model compounds, the cellular mechanisms by which these lipid prodrugs exert their activity will be examined versus the free nucleosides in vitro and their efficacy will be tested in vivo in models of retroviral disease and of hepatitis B and compared with the efficacy of the free nucleosides. The specific aims of this proposal are :(1) the biochemical factors which regulate the antiviral activity of dideoxynucleoside phospholipid prodrugs in HIV- and HBV-infected cells will be assessed using dideoxycytidine and ara-AMP as model compounds; (2) the in vitro selectivity index for ddC and ara-AMP liponucleotides will be determined in HIV- and HBV-infected cells; (3) the pharmacokinetics of ddC and ara-AMP liponucleotides vs their free nucleosides will be determined at various times as a function of the lipid formulation and route of administration and (4) the efficacy of ddC and ara-AMP liponucleotides will be determined in animal models of hepatitis and retroviral disease. The investigators believe that the proposed studies will generate basic data on the metabolism, pharmacology and efficacy of these prodrugs and could lead to more effective and less toxic therapies for AIDS and hepatitis B.